Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/54122
Authors: 
Rand, John
Tarp, Finn
Year of Publication: 
2010
Series/Report no.: 
Working paper // World Institute for Development Economics Research 2010,16
Abstract: 
This paper uses a unique panel dataset on firm-level corruption. It contains quantitative information on bribe payments by a sample of formal and informal Vietnamese firms. We show that bribe incidence is highly associated with firm-level differences in (i) visibility, (ii) sunk costs, (iii) ability to pay, and (iv) level of interaction with public officials. Moreover, when informal firms become formal the probability of paying bribes increases. Becoming formal is also associated with a revenue growth premium that is not driven by self-selection of well-performing firms. On average, this premium outweighs the additional bribe cost of formalization. Formalization embodies net benefits in spite of the growth hampering effects of bribes.
Subjects: 
firm performance
corruption
Vietnam
JEL: 
L25
O17
O53
ISBN: 
978-92-9230-251-1
Document Type: 
Working Paper

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